Farakh Alikhani has been appointed as the acting head of the National Iranian Oil Company. This decree was issued by Hamid Bord, the acting Minister of Oil. This managerial change comes at a time when oil industry executives have provided forecasts for oil prices.
Oil Price Forecast in the Medium-Term Horizon
Oil executives have predicted that the average price of WTI crude oil will be around $88 per barrel in the next six months. The forecasts for the next year are $82, for the next two years $79, and for the next five years again $82. This report indicates that the average daily price of WTI at the time of the survey reached approximately $98.70.
Read more: Progress in Launching LNG Port Arthur Aiming to Start Operations in 2027
The pricing criteria in this survey clearly indicate that executives do not expect prices close to $100 to remain sustainable. Therefore, the average price forecast for the end of 2026 is estimated to be around $88.38. Meanwhile, the range of predictions has varied from $70 to $126, reflecting significant uncertainty in the market.
Changing Financial Behavior of Oil Companies
Surveys also show a change in the financial behavior of American oil producers. Among large companies, 50% of executives have stated that they will primarily allocate additional free cash flow to shareholder returns. In contrast, only 21% consider this expenditure their top priority. Meanwhile, among smaller companies, 31% have prioritized investment and 23% have prioritized debt reduction.
This change in behavior indicates that rising oil prices do not necessarily lead to increased production. Major oil companies, after years of emphasizing capital discipline, are returning part of the additional revenue to shareholders, and as a result, the supply response to high prices may be slower than in previous cycles.
In the diesel sector, this survey shows that 48% of the 100 responding companies expect the price gap between diesel and crude oil to take more than four quarters to return to 2025 levels. Meanwhile, 36% hold the same view for gasoline.
Ultimately, the results of this survey reflect fundamental changes in the mindset of the American oil industry. Industry managers no longer consider their base scenario to be oil priced at $60 to $70, and a price range of about $80 to $90 has become the new reference range in the medium-term horizon.
Read more: The Role of Dana Energy Exploration and Production in the Iranian Oil Industry · Iran Maintains Control of the Strait of Hormuz and Oil Exports Have Reached Zero
